The very short answer to this question is: you are still legally obligated to make your monthly loan payments to the bank or financial lender until the loan is paid off. The fact that your car was a total loss does not change your loan repayment terms. Your legal obligation to repay the loan continues.
Can you get money back from gap insurance?
Full GAP Insurance Refund Terms and fees may vary across GAP insurance providers. Typically, you should get a full refund on your GAP insurance if you cancel the contract within 30 days of purchasing the policy, though cancelation fees may apply.
Do you still have to pay your car loan if your car is totaled?
If you have “gap” insurance, this type of insurance coverage might pay the difference between the amount of the insurance company’s check and the amount you still owe on the car loan. To determine if you have gap coverage, consult the language of your insurance policy or speak with your insurance agent.
What to do if your car is totaled but not your fault?
If your car is totaled and you still owe on it but the accident was not your fault, contact the at-fault driver’s insurance company with your lender information. To maintain your good credit, you should to continue to make your loan or lease payments until the insurance company issues payment to your lender.
Do you owe more on your car loan than the value of the car?
Add to those longer loans with how quickly a car depreciates, and you see why consumers may owe more on their car loans than what the vehicle is actually worth. If your vehicle is totaled and you still owe more than it’s worth, your car insurance company will pay only actual cash value (ACV) for your vehicle.
What happens if my car is a total loss?
Even if your car is deemed a total loss and you can no longer use it, you are still responsible for paying any balance left on the car loan. There is, however, one way to avoid having to pay the remainder of your car loan.
